How to get financial backing for operational improvement

How to get financial backing for operational improvement

  • Reduced operating cost
  • Greater business capacity
  • Improved efficiency
  • Stricter compliance
  • Enhanced customer experience
  • Improved staff morale

Each of these benefits brings a positive commercial impact, and together, they deliver a boost to overall organisational capability that far outweighs the sums of the parts. But getting sign-off on the investment to deliver operational improvements isn’t always straightforward, and it can be a struggle to convince the board to buy into the importance of the operation and how it delivers long term sustainability.

Yet as the CEO you are all too aware of the responsibility to drive operational improvements forward, because if you fail to do so, the long-term consequence is a steady decline in performance vis-à-vis the competition.

“An investment in knowledge pays the best interest.”

Benjamin Franklin
Businessman using his tablet

De-risking investment in operational improvement

It is completely understandable that board members express reservations about making investments in operational improvement. And as the CEO, it’s likely you’ll have to answer some pretty searching questions, such as:

  • What if we authorise the investment but the promised gains don’t materialise?
  • Are there any hidden cost implications associated with this investment? For example, IT infrastructure upgrades?
  • Don’t we already have this capability ?
  • When will the investment deliver a positive return?

Addressing these concerns is therefore a critical step, both in terms of gaining buy-in from the board, and also in performing due diligence before making any investment decision. The best way to answer such questions is a thorough diagnostic of your operations.

An experienced specialist partner will be able to provide a detailed diagnostic of your operations, which will identify and accurately assess potential cost savings and productivity gains, and demonstrate how you can facilitate business growth without the need for additional FTE. In addition to laying bare the weakness in your existing operations, a diagnostic is a core element of a robust business case for investment in operational improvement.

“Risk comes from not knowing what you’re doing.”

Warren Buffett
Problem in business

An objective view of operational performance

The other question that is frequently asked is “why can’t we carry out a diagnostic using internal resource?” And the answer is that it’s almost impossible to drive change internally, as the business’ front-line managers will often lack the perspective to fully understand what isn’t functioning optimally, both at a granular process level and inter- departmentally. They simply won’t have the broad experience to be able to identify areas where duplication and other inefficiencies exist.

It’s also politically very challenging to drive change internally. An external specialist has the knowledge and experience to view operations rationally and objectively, and provide recommendations untainted by any personal or political bias. They can carry out a robust review of your operations and ask the kind of questions that are usually ‘swept under the rug’ during internal reviews.